Johannesburg - South Africa’s rand slumped for a fourth day, falling to a 10-week low against the dollar as a global bond selloff intensified on speculation President-elect Donald Trump’s spending pledges will fuel inflation and trigger US rate increases.
The currency declined 1.1 percent to 14.4969 per dollar by 11.10am in Johannesburg, heading for the weakest closing level since September 2.
Yields on benchmark government bonds due 2026 climbed 9 basis points to 9.27 percent, the highest in more than five months. The yield on the country;’s 10-year dollar bonds jumped 10 basis points to 4.99 percent, the highest since May.
Sovereign bonds extended a record debt selloff, lifting the 30-year US Treasury yield above 3 percent for the first time since January. Foreign investors sold a net R9.9 billion ($683 million) of South African bonds last week, according to JSE data.
“A weekend normally brings some calm to agitated markets but we still feel some further rand weakness may be in order,” John Cairns, a currency strategist at Johannesburg-based Rand Merchant Bank, said in an emailed note. “It does not seem like it will take much to get markets panicking again.”
BLOOMBERG